ForexMorningTrade System

[wiseambitions]

The key factor is the number of wins versus losses. You can have a bad risk/reward ratio and still do well. You just have to have a system that consistently makes more wins than losses. I tend to like the 10/40 method. Slow but steady. Same essence as the penny a day theory.
Lady Forex

Just a word of caution. I attempted a backtest through the EA for 2008 and have found 10/40 did not achieve any good at all. There is a possibility of bad data in that test, however whilst it suggests 40/40 would have yielded about 800 pips in the year (it was a sticky year for FMT), 10/40 would have been a stand still. Apparently 43/65/BE as per Deserteagle's findings would have done well. eg +1100 (remember I am not 100% happy with the data set and usually prefer to check these things out the long way).

What we are liable to find is that as market conditions change so do the ideal exit settings. And nobody can predict which will do best at any future time. Leads me to suggest there''s safety in splitting the stops with diversity in your TP and SL numbers. There is no universal panacea for this stuff

 

[Lady Forex]

What we are liable to find is that as market conditions change so do the ideal exit settings. And nobody can predict which will do best at any future time. Leads me to suggest there''s safety in splitting the stops with diversity in your TP and SL numbers. There is no universal panacea for this stuff[/QUOTE]


I agree with this statement.

Lady Forex

 

[Icepop]

I tried a TP 10/ SL 40 which was great winning... but taking a -40 hit wipes out 4 days profits... and this hurts!! I soon moved my TP to 25 which now seems a much more sensible risk/ reward ratio

 

[Liberator]

Hi folks, I'm new here. Might someone please banish a little ignorance?

That FMT blue bar, on the MT4 chart. I understand its left edge is the entry time. But what is the right edge (EndTime, 2 hours later) for? - is one's order to expire in some way at that time?

 

[GumRai]

Wouldn't compounding (MM 5%) make this strategy much less profitable? The first 40SL draws down more valuable pips, and the 4 x 10 tp's, even consecutively, would still not make up the profit lost on the initial -40. I'm pretty new at this, and need guidance.

with 5% risk, SL 40, TP 10

yes you are right, when compounding, 4 winners will not quite make up for the loss incurred in one losing trade, however, it makes no difference to the end result what order the wins and losses occur. The only important thing is the ratio of wins to losses.

The example results above showed 47 winners and 3 losers from a series of 50 trades.
Wherever the 3 losing trades occur in the series of 50, the end result will be exactly the same.

If you started with a 1000 Pound account and simply risked 5% of your starting balance on every trade, after 47 winning trades out of 50, you would have made 437 Pounds profit.
By compounding you would gain an extra 100 Pounds

If the winning rate should drop to 40 out of 50 trades, risking 5% of your starting balance on every trade would result in break-even.
By compounding you would have made a small loss of 16 Pounds

The turning point is 43 winners from 50 trades. At 43 or more, compounding will give higher returns than the simple 5% of the starting balance.

These examples assume that you would be able to place a trade with a lot size that exactly equals 5% of your balance and this is unlikely, but it would probably even out over time

 

[Lady Forex]

Hi folks, I'm new here. Might someone please banish a little ignorance?

That FMT blue bar, on the MT4 chart. I understand its left edge is the entry time. But what is the right edge (EndTime, 2 hours later) for? - is one's order to expire in some way at that time?

That is the best range for the trade and most of the time the trade reaches tp or sl within that period, however, as far as I know there has not been a recommendation to close the trade if it is still open at the end of the range.

Lady Forex

 

[deserteagle]

By doing a bit of technical analysis, there is a resistance level at 1,6185 which can bother us if we have a long signal tomorrow. Hope we can finish the week with a quick and profitable trade.

 

[wiseambitions]

By doing a bit of technical analysis, there is a resistance level at 1,6185 which can bother us if we have a long signal tomorrow. Hope we can finish the week with a quick and profitable trade.

A lot could change in the next 8 hours. On the 1hr chart price is already starting to fall below the 5hr EMA which I rate as bearish. And Heiken Ashi candles on the 1hr chart have gone to red. Same comments.

So we'll have to see what the FMT indicators tell us and the EAs to do at 06.30

Time for now in the UK and Europe

 

[Drummer Boy]

Morning Ladies and Gents,

Some great data analysis yesterday. Thank-you wiseambitions and many others. Very interesting stuff.

Chris's MM recommendations for progressively locking in gains and taking money off the table makes sense. This is surely the way the pro's do it. 10/40 hit stats currently suggest that this will provide consistency. RR ratios are still a bit nerve racking and probably go against conventional wisdom but results of these parameters do seem to be pretty impressive. Particularly if employed with the dynamic compounding - mentioned.

I suppose the next trick is to figure out how or if we can automate this stategy as much as possible. May be our sponsor can help. After all, FMT's entry criteria remains the corner stone of the plan.

Perhaps we could also consider how we might mitigate the naked (but I would suggest, highly probable) risk of a protracted run of - 40 losses. May be some kind of heavily biased progressive reduction in risk capital mechanism - employed after (say) two successive losses.

Clearly such a mechansim would reduce profits and the logic behind it might sound a bit daft but it would also erradicae the risk of blowing the account.

Regrettably I'm not the mathmatical genius that many of you on this journal clearly are. So any comments or suggestions would be welcome. As you can see my own primary objective is to 'stack the deck as much as possible.

Rgds

DB

Rereading these comments make me sound like a pro gambleracing punter betting on the gee gees. Which I can assure you I am not,

 

[OWL75]

Liberator

The 2 hour blue bar is only to see the blue bar clearly. There is no reason on indicator associated with it. You can set the blue bar length to what ever your comfortable with.

Oh, and a win this morning.

 

[Lady Forex]

Liberator

The 2 hour blue bar is only to see the blue bar clearly. There is no reason on indicator associated with it. You can set the blue bar length to what ever your comfortable with.

Oh, and a win this morning.

The manual sayes to set it at 2 hours.

Lady Forex

 

[OWL75]

...and it also says this is purely for aesthetic purposes. You can change it to 5 hours or 5 mins, it won't affect anything. The start time (begining of the blue bar) is the only matter.

 

[RedGuerrilla]

Stats for 02-17-2011



'Live' Accounts:

FMT 4.2, FXSolutions, dealing desk, Long/Profit, 1.6111, 1.6146, +35.0 pips
My stats since 11-08-2010: 14 No Trades, 19 Break Evens, 20 Losses, 20 Profits, Total: -122.0 pips
Pips include slippage, using EA standard settings: 40 SL, 20 BE, 35 TP
Comparing with Mark's live account since 11-08-2010: Total: -18.0 pips

FMT 4.2, IBFX, non-dealing desk, Long/Profit, 1.61104, 1.61439, +33.5 pips
My stats since 01-04-2010: 7 No Trades, 7 Break Evens, 8 Loss, 11 Profits, Total: +51.2 pips
Pips include slippage, using EA standard settings: 40 SL, 20 BE, 35 TP
Comparing with Mark's live account since 01-04-2011: Total: +59.0 pips



Demo Accounts:

FMT 4.2, non-dealing desk brokers, 5:Long/Profit
PFG Best, 1.61105, 1.61452, +34.7
FOREX.com, 1.61101, 1.61452, +35.1
FXCM, 1.61076, 1.61420, +34.4
Alpari(US), 1.61083, 1.61433, +35.0
FXDD, 1.61109, 1.61467, +35.8



Testing new tweaked settings, based on back testing. For more details, see Post #5659, page 708:

FMT 4.2 EA, GBPUSD M15 Chart, UK time zone.
Using PFG Best Demo Account, Settings: SL=40, TP=30, BE=20, BE+5 pips
6:15 start, buy trade, 1.61077, 1.61134, hit BE= +5.7 pips ...
My stats since 01-20-2011: Total: +98.5 pips
Comparing with FXSolutions live account since 01-20-2011: Total: +114.0 pips


Testing other systems, subject to back testing.
Lost my back testing system, and I don't have time right now to get it back.

FMT 4.2 EA, GBPUSD M15 Chart, UK time zone.
Using PFG Best Demo Account, Settings: SL=40, TP=30, BE=20, BE+5 pips
13:15 start, buy trade, 1.61279, 1.61591, hit TP= +31.2 pips ...
My stats since 02-01-2011: Total: -113.6 pips

FMT 4.2 EA, EURUSD M15 Chart, UK time zone.
Using PFG Best Demo Account, Settings: SL=40, TP=30, BE=20, BE+5 pips
13:15 start, no trade, 0.0 pips ... :-|
My stats since 02-01-2011: Total: +42.1 pips
Comparing with FXSolutions live account since 02-01-2011: Total: +89.0 pips

FMT 4.2 EA, EURUSD/USDCHF M15 Chart, UK time zone.
Using PFG Best Demo Account, Settings: SL=20, TP=7, BE=0
23:00 start, EURUSD, buy trade, 1.36070, 1.36142, hit TP= +7.2 pips
23:00 start, USDCHF, no trade, 0.0 pips
Total for both trades: +7.2 pips ...
My stats since 02-03-2011: Total: -26.4 pips

 

[Lady Forex]

...and it also says this is purely for aesthetic purposes. You can change it to 5 hours or 5 mins, it won't affect anything. The start time (begining of the blue bar) is the only matter.

You are correct in what you are saying as to how the blue zone works but my manual does not state "this is purely for aesthetic purposes."
(However it is.)

COPIED FROM THE MANUAL:

No, the blue zone is used only to indicate the entry time. The end of the blue zone doesn’t mean anything; we run the trade until it hits either Profit or Stop loss.

Lady Forex

 

[wiseambitions]

Morning Ladies and Gents,

Some great data analysis yesterday. Thank-you wiseambitions and many others. Very interesting stuff.

10/40 hit stats currently suggest that this will provide consistency. RR ratios are still a bit nerve racking and probably go against conventional wisdom but results of these parameters do seem to be pretty impressive.

Perhaps we could also consider how we might mitigate the naked (but I would suggest, highly probable) risk of a protracted run of - 40 losses.

Thanks, according to my initial findings, 10/40 only gave 2 losses in the whole of December 2010 (E&OE!) whereas 40/40 suffered 7 consecutively at one stage.

While all this is reassuring, please be careful because like I said yesterday a backtest for whole of 2008 (via MT4 EA) said 10/40 did not yield any net gain at all. Whereas 40/40 did give out about 800 pips in a difficult year (credit crisis prevailing)

Probably we need two or three exit settings running simultaneously, to get some gains from various price shifts, and we haven't even talked about the effects of different starting times than 06.30 on the UK clocks.

 

[bouzo132]

No trade IBFX

 

[Icepop]

No trade Alpari UK. That's 3 wins, 1 loss and a no trade this week. Not bad FMT!!

 

[wiseambitions]

Friday morning 06.30 UK time
No signal here - very borderline, possibly looking bearish

40MA on 15m is flat. Confirms lack of trend

63hr EMA on 1 hr chart is below price which might be a bullish sign.

06.15 starters might have had a long signal, but the candle ended lower. After 06.30 now some retracement

Safest to obey the FMT rules

 

[wiseambitions]

Stats for 02-17-2011



'Live' Accounts:

FMT 4.2, FXSolutions, dealing desk, Long/Profit, 1.6111, 1.6146, +35.0 pips
My stats since 11-08-2010: 14 No Trades, 19 Break Evens, 20 Losses, 20 Profits, Total: -122.0 pips
Pips include slippage, using EA standard settings: 40 SL, 20 BE, 35 TP
Comparing with Mark's live account since 11-08-2010: Total: -18.0 pips

FMT 4.2, IBFX, non-dealing desk, Long/Profit, 1.61104, 1.61439, +33.5 pips
My stats since 01-04-2010: 7 No Trades, 7 Break Evens, 8 Loss, 11 Profits, Total: +51.2 pips
Pips include slippage, using EA standard settings: 40 SL, 20 BE, 35 TP
Comparing with Mark's live account since 01-04-2011: Total: +59.0 pips

Thanks, I always study your findings and find them very interesting and carefully researched.
Presumably you meant to put 2011 not 2010 in the YTD performance

Have a good weekend

 

[trader578]

Hi guys,
I've been reading the last few posts of this thread and I think there are some good ideas recently. Here is my elaboration of these ideas which I can confirm from backtesting seems to be profitable: Set up one GU chart for long trades only at 10tp 40sl, and another GU chart for short trades only at 40tp 40sl 24be. The short trades allow us to quickly recover from the poor R:R of the long trades, and the long trades give us reliable consistent profits when short trades are not available.
Cheers